Grant Thornton Hungary Newsletter
5% VAT on the sale of the apartments built on brownfield sites
The Parliament passed the Act on Brownfield Action Sites Implementation Measures which is aimed at the development of so called city brownfield sites, one of the measures being promotion of residential housing constructions. Brownfield action sites are city properties that are abandoned, idle, underutilized, with known or suspected pollution including soil contamination due to hazardous waste, but with a potential for redevelopment due to their favourable location. Act LXXVIII of 1997 on the Formation and Protection of the Built Environment contains the definition of the brownfield action site and two subcategories thereof (the immediate action brownfield site and the medium and longer term action brownfield site), whereas identified particular brownfield sites will be set out by a forthcoming Government decree.
Sale of new apartments with a total useful floor area under 150 square meters in multiapartment residential buildings constructed on the brownfield will be liable to 5% VAT instead of the standard 27%.
The 5% VAT rate is first applicable to those apartment sales whose performance date falls on, or follows the date of entry into force of this Act (i.e. on the 8th day following the promulgation).
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